Exit Exam Preparation Tutorial for HRM Wolaita Sodo University PDF

Exit Exam Preparation Tutorial for the HRM Compiled By : Temesgen.T(Ass. Prof. @ WSU & PhD-Candidate @ AMU) Editor and Reviewer : Aman.K(Lecturer @AMU & Sinor System Admin @Infolink College) Wolaita Sodo University June, 2023  Competencies/General...

Exit Exam Preparation Tutorial for the HRM Compiled By : Temesgen.T(Ass. Prof. @ WSU & PhD-Candidate @ AMU) Editor and Reviewer : Aman.K(Lecturer @AMU & Sinor System Admin @Infolink College) Wolaita Sodo University June, 2023  Competencies/General Objectives Students are expected to be capable of competently mange Human resource through understanding major principles and techniques of Human resource management system.  Contents/Chapter CH 1: An Over View Human Resource Management CH 2: Human Resource Management Environments CH 3: Job Analysis & Human Resource Planning CH 4: Recruitment & Selection CH 5: Training and Development CH 6: Performance Appraisal CH 7: Compensation CH 8: Integration and Maintenance CH 9: Promotions, Transfers and Separation  CH 1: An Over View Human Resource Management Chapter Objective; Understand the operative functions of Human resource management Recognize the importance and significance of human resource as an asset  1.1. Definition HRM is that part of management concerned with people at work and with their relationships within an enterprise. Human resource management is the process of accomplishing organizational objectives by acquiring, retaining, terminating, developing and properly using the human resources in an organization. (Ivncevich ) Human Resource Management (HRM) is a process of bringing people and organizations together so that the goals of each are met. It is part of the management process which is concerned with the management of human resources in an organization.  1.2. Functions of Human Resource Management The main functions of human resource management are classified into two categories: Managerial Functions and Operative Functions 1. Managerial Functions Planning Organization Directing Controlling 2. Operative Functions Procurement of Personnel Development of Personnel Compensation of Personnel Maintaining Good Industrial Relation Record Keeping Personnel Planning and Evaluation  1.4. Objectives of Human Resource Management Objectives of personnel management are influenced by organizational objectives and individual and social goals. The fundamental objective of any organization is survival. Organizations are not just satisfied with this goal. Further, the goal of most of the organizations is growth and/or profits. Institutions procure and manage various resources including human to attain the specified objectives. Thus, human resources are managed to divert and utilize their resources towards and for the accomplishment of organizational objectives. Therefore, basically the objectives of HRM are drawn from and to contribute to the accomplishment of the organizational objectives.  Objective Cont… The objectives of HRM may be as follows: To create and utilize an able and motivated workforce, to accomplish the basic organizational goals. To secure the integration of individual or groups within the organization by co-ordination of the individual and group goals with those of the organization. To create facilities and opportunities for individual or group development so as to match it with the growth of the organization. To attain an effective utilization of human resources in the achievement of organizational goals.  Cont… To identify and satisfy individual and group needs by providing adequate and equitable Compensation. To maintain high employees morale and sound human relations by sustaining and improving the various conditions and facilities. To strengthen and appreciate the human assets continuously by providing training and development programs. To provide facilities and conditions of work and creation of favorable atmosphere for maintaining stability of employment.  The Significance of HRM The significance of HRM can be seen in three contexts: organisational, social and professional. A) Organisational Significance HRM is of vital importance to the individual organisation as a means for achieving their objectives. It contributes to the achievement of organisational objectives in the following ways: 1. Good HR practice can help in attracting and retaining the best people in the organisation. 2. Developing the necessary skills and right attitudes among the employees through training, development, performance appraisal, etc. 3. Securing willing cooperation of employees through motivation, participation, grievance handling, etc. 4. Effective utilisation of available human resources. 5. Ensuring that enterprise will have in future a team of competent and dedicated employees. B) Social Significance Social significance of HRM lies in the need satisfaction of personnel in the organisation. Since these personnel are drawn from the society, their effectiveness contributes to the welfare of the society as: 1. Employment opportunities multiply. 2. Eliminating waste of human resources through conservation of physical and mental health. 3. Scare talents are put to best use. C) Professional Significance Developing people and providing a healthy environment for effective utilisation of their capabilities. This could be achieved through: 1. Developing people on continuous basis to meet challenge of their job. 2. Promoting team-work and team-spirit among employees. 3. Offering excellent growth opportunities to people who have the potential to rise. 4. Providing environment and incentives for developing and utilising creativity.  Trends EnhancingThe Importance Of HRM 1.The increase in globalization of 2. Technological changes the economy ▪ Products and services can be ▪ International employment ▪ World wide labor market delivered more effectively ▪ Greater competition through an optimal combination ▪ Global companies of people,software and equipment. 3. The need to be flexible in response to changing business environment 4.Increasing in litigation related to ▪ Outsourcing HRM ▪ Downsizing ▪ Proliferation of regulations ▪ Temporary employees related to personnel decision ▪ Independent contractors ▪ Reengineering 5.Changing characteristics of the work force ▪ Ethnically diverse ▪ More educated ▪ More diverse ▪ Becoming less prepared to handle the challenges of work today  CHAPTER TWO HUMAN RESOURCE MANAGEMENT ENVIRONMENTS Chapter Objective Recognize the environmental influence experiencing human resource and deal with these factors Introduction The environment of an organization consists of the conditions, circumstances, and influences that affect the firm's ability to achieve its objectives. In order to have an effective HR program, HR managers must give careful attention to all aspects of the environment. Rapid changes are occurring within society and therefore in the environment within which organizations operate. HRM balances the needs of the organization with the realities of the internal and external environments. The HR Professional must consider the kinds of changes that are anticipated and their effects on HRM.  2.1. The External Environment  The external environment is composed of two layers: ▪ The general environment and the task environment.  The General Environment ▪ The Economic Environment ▪ The Technological Environment ▪ The Political-Legal Environment ▪ The Socio-Cultural & demographic Environment ▪ The Physical Environment  The Environment of HRM.. The Task Environment – The Customers – The Owners – The Competitors – The Partners  1. The external environment The environment that exists outside an organization Changes in the organization‘s external environment evolve at varying rates and it exert considerable influence on HRM. A. Economic Condition - Economic forces include growth rate and strategy, industrial production, per capita incomes, money and capital markets, competitions, industrial labour and globalization. All these forces have significant influence on wage and salary levels.  External Cont… B. Technological advancement:-Technology is a systematic application of organized knowledge to practical tasks. Technological advances affect the HR functions in more than one way: Technology makes the job more intellectual or upgraded. It renders workers dislocated if they do not equip themselves to the job. Job becomes challenging for the employees who cope with the requirements of technology Technology reduces human interaction at the work place. Finally job-holders become highly professionalized and knowledgeable in the job they perform.  External Cont… C. Government Regulations:- Some of legislation and regulation includes: – Equal employment opportunity – Sex and age discrimination. – Compensation regulation – Hours of work, national holidays, etc. – Benefit Regulations – Worker‘s safety laws – Privacy laws protecting employees‘ personal information. – Labor relations laws and regulations: affects the conduct of collective bargaining.  2.2. The Internal Environment – Mission – Policy – Organizational Culture Other factors include: – The organization's management – The organization's employees – The organization's structure – The organization's rules and procedures etc.  Cont… It is the environment that exists within an organization 1. Strategies and Operational Objectives: Organizations have strategic and operational objectives determining the direction of the business. When organizations change their strategies, they are determining the direction that it should take. Consequently, all plans that follow the strategic decisions will also change including the human resource requirement in terms of quantity, skill and experience.  Internal Cont… 2. Financial Condition and Flexibility: Financial status of an organization has a particularly critical influence on personnel activities. If an organization is in a good financial condition, it is likely to increase the quantity of its employees or even offer higher salary increments to its employees. However, if the organization is not in a good financial condition, it is most likely to reduce its employees. This is especially true for those labor intensive organizations such as education, health care, etc..  Internal Cont… 3. Nature of the Task:-The kind of employees found in a given organization is highly influenced by the kind of tasks/activities performed. Some of the issues relevant for employees in choosing to work for a certain organization include degree of physical exertion required, degree of environmental unpleasantness, physical location of work, time dimension of work, human interaction on the job, degree of autonomy in the task, etc… 4. Culture and Philosophy of Organizations: -Organizational culture refers to the “values, beliefs and traditions shared by all members in an organization.” If an organization has a well defined and practiced culture its employees should be able to feel comfortable to operate in that environment and adhere to the established culture.  Internal Cont… 5. Unions:- Trade unions are formed to safeguard the interest of its members/workers. HR activities like recruitment, selection, training, compensation, industrial relations and separations are carried out in consultation with trade union leaders.  Steps in Dealing with Environmental Changes Monitor the environment: Personnel specialists must stay informed about likely changes in the environment by belonging to professional associations, attending seminars, furthering their formal education, and reading widely. Evaluate the impact: As new information is acquired, personal experts ask the impact of this information on the organ today & tomorrow. Take proactive measures: Once changes and their impact are evaluated, personnel specialists implement approaches that help the organization reach its goals. Obtain & analyze feedback: The results of proactive personnel activities are then evaluated to see if the desired outcomes are reached. CHAPTER THREE Job Analysis & Human Resource Planning  3.1. Meaning and definition of job analysis Definitions of job analysis A job analysis is a systematic exploration of the activities within a job. It is the process of collecting and analyzing information about jobs and employee’ s knowledge or skills necessary to perform them It is the process of defining a job in terms of its components, activities and requirements Job analysis provides information about jobs currently being done and the knowledge, skills, and abilities that individuals need to perform the jobs adequately  When Job Analysis Is Performed ? When the organization is founded and a job analysis program is initiated When new jobs are created When existing jobs are changed significantly as a result of new technology, methods, procedures or systems Types of Information Collected for JA Work activities Human Human requirements behaviors Information Collected Via Job Analysis Machines, tools, Job equipment, and context work aids Performance standards  Types of Information Collected Actual work activities of the job—how, why, and when the worker performs each activity. Human behaviors the job requires: communicating, deciding, and writing etc Machines, tools, equipment, and work aids used on the job: tools used, materials processed, knowledge dealt with or applied, and services rendered Standards of expected employee job performance: quantity and\or quality output levels that can be used to appraise employees. The organizational and social context in which the job exists: physical working conditions, work schedules, and incentives The job’s human requirements: job-related knowledge or skills and required personal attributes Methods of collecting job analysis information 1. Observation Method A job analyst watches employees directly or reviews films of workers on the job. Although the observation method provides firsthand information, workers rarely function most efficiently when they are being watched, and thus distortions in the job analysis can occur. This method also requires that the entire range of activities be observable, which is possible with some jobs, but impossible for many others—for example, most managerial jobs. 2. Individual & group Interview Method Meeting with an employee to determine what his or her job entails. The individual interview method assembles a team of job incumbents for extensive individual interviews. 3. Structured Questionnaire Method A specifically designed questionnaire on which employee‘s rate tasks they perform in their jobs. This technique is excellent for gathering information about jobs. However, exceptions to a job may be overlooked, and opportunity may be lacking to ask follow-up questions or to clarify the information received. 4. Technical Conference Method A job analysis technique that involves extensive input from the employee‘s supervisor. The technical conference method uses supervisors with extensive knowledge of the job Here, specific job characteristics are obtained from the experts. Although a good data-gathering method, it often overlooks the incumbent workers‘ perceptions about what they do on their job 5. Diary Method A job analysis method requiring job incumbents to record their daily activities. The diary method requires job incumbents to record their daily activities. These six methods are not mutually exclusive; nor is one method universally superior. The best results, then, are usually achieved with some combination of methods—with information provided by individual employees, their immediate supervisors, a professional analyst, or an unobtrusive source such as filmed observations. Clerical and administrative jobs: Questionnaires supported by interviews and limited observation Production jobs: Interviews supplemented by extensive work observation  Types of Information Collected How much time is taken to complete important jobs tasks? Which tasks are grouped together and are considered a job? How can a job be designed or structured so that employee performance can be enhanced?  Cont.. What kinds of behaviors are needed to perform the Job? What kind of person (traits and experience) is best suited to the Job? How can the information acquired with a job analysis are used in the development of HRM programs.  Importance of job analysis information ▪ Staffing Tasks Responsibilities Duties ▪ Training and Development ▪ Performance Appraisal Job ▪ Compensation Descriptions ▪ Safety and Health Job ▪ Employee and Labor Analysis Job Relations Specifications ▪ Legal Considerations Knowledge Skills Abilities  Cont…. Job analysis process generates two tangible outcomes: job descriptions, job specifications. A. Job Descriptions It is a written record of the duties, responsibilities and requirements of a particular job. It is concerned with the job itself and not with the worker. It is a statement describing the job in such terms as its title, location, duties, working conditions and hazards.  Job description contains the following: Job identification:- which includes the job title, department, division, plant and code number of the job. Job Summary:- It gives the reader a ―quick capsule explanation‖ of the content of a job usually in one or two sentences. Job duties :- It is regarded as the heart of a job. Relation to other jobs: It gives us an idea of the vertical and horizontal relationships of work flow and procedures. Working conditions usually give us information about the environment in which a job holder must work. These include cold, heat, dust, wetness, moisture, fumes, odor, oily conditions, etc. B. Job Specifications The job specification states the minimum acceptable qualifications that the incumbent must possess to perform the job successfully. Based on information acquired through job analysis, the job specification identifies pertinent knowledge, skills, education, experience, certification, and abilities. Individuals possessing the personal characteristics identified in the job specification should perform the job more effectively than those lacking these personal characteristics. It is used as an important tool in selection process Job specifications relate to; Physical characteristics, which include health, strength, endurance, age-range, body size height, weight, vision, voice, eye, hand,…. etc Personal characteristics ; personal traits of such as emotional stability, aggressiveness or submissiveness, extroversion; or, introversion, etc Education & Training qualification Work experience Other features of a demographic nature, which are age, sex, and education experience and language ability  3.2. Human Resource Planning (HRP) Human resource planning is the process of systematically reviewing human resource requirements to insure that the organization has the right number and kinds of people, at the right places, and at the right time. (Decenzo& Robbins) It is ‗the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements‘ concerned with matching human resources to business needs In general, HRP translates the organizations objectives and plans in to the number and type of workers needed to meet those objectives.  The Importance of HRP – Enables a manager to predict his/her manpower requirements, to determine and control wage and salary costs. – Provides management information about the existing strength and weaknesses of the people in the organization. – Assesses the kinds of skills required to be developed as well as recruited. – Estimates human resource requirements over a specified time frame in relation to the organization's goals. – anticipate the problems of potential surpluses or deficits of people – reduces dependence on external recruitment  Human Resource Planning Process External Environment Internal Environment Strategic Planning Human Resource Planning Forecasting Forecasting Human Comparing Human Resource Requirements Resource Requirements and Availability Availability Demand = Surplus of Shortage of Supply Workers Workers No Action Restricted Hiring, Recruitment Reduced Hours, Early Retirement, Layoffs, Selection Downsizing Steps [procedures] in human resource planning 1. Analysis of Organizational Plans and Objectives Human resource planning is a part of overall plan of organization. Plans concerning technology, production, marketing, finance, expansion and diversification give an idea about the volume of future work activity. 2. Forecasting Demand for Human Resources: Demand forecasting is the basis on which manpower planning is built. Almost all HRP begins by determining future human requirements.  Techniques of HR demand forecasting Generally managers can use the following techniques to forecast HR demand: 1. Judgmental Approach 2. Job analysis 3. Work study 4. Statistical Techniques 5. Productivity Measurement Method  3. Forecasting supply of human resource Once future demand for manpower is projected, the next major concern is how to fill projected openings. There are two major sources of supply of manpower for an organization. These are: i. Internal source of supply- includes present employees who can be promoted, transferred, or demoted. ii. External source of supply - consist of people who do not work for the organization currently like employees of other organization and the unemployed group of the society.  4. Estimating Manpower Gaps: Net human resource requirements or manpower gaps can be identified by comparing demand and supply forecasts. Such comparison will reveal either deficit or surplus of human resources in future. Deficits suggest the number of persons to be recruited from outside whereas surplus implies redundant to be redeployed or terminated. Similarly, gaps may occur in terms of knowledge, skills and aptitudes. Employees deficient in qualifications can be trained whereas employees with higher skills may be given more enriched jobs.  5. Matching Demand and Supply: 1. Options to address shortages Short -term options Long-term options Increase overtime or part time New hires Increase contrat works Permanent transfer in Increase productivity worker through training Training and Buy back vacations and development holydays Temporary assignments Transfer work -out Transfer work -out permanent temporarily 2. Options to Address Surplus Short -term option Long-term options Reduce part-time work Freeze hires Transfer work -in tempera Encourage attrition rely Permanent transfer -out Reduce work weeks of worker Temporary shutdown or Retrenchment layoff Provide incentive for early Excuse absenteeism retirement Temporary assignment to Transfer work-in other uni  CHAPTER FOUR Recruitment, Selection, and Induction/ Socialization 54  4.1. Employee Recruiting Once HRM needs are known through HRP, an organization will strive to meet them. Definition Recruitment is the process of the process of searching and attracting individuals; ▪ on a timely basis, ▪ in sufficient numbers & ▪ with appropriate qualifications and encouraging them to apply for jobs with an organization It involves seeking and attracting a pool of people from which qualified candidates for a job vacancies can be chosen. It ends when the applicants submitted application 55  Cont…. it involves: Identifying the sources where the required number and kind of employees are/will is available. Developing suitable techniques to attract the desirable candidates Stimulating as many candidates as possible and be able to attract large number of candidates. – The higher the number of applicants the better chance of being selective in the hiring process. 56  4.1.2 Factors governing recruitment HRM recruitment process is affected by both internal and external environmental factors. These factors could facilitate or limit the recruitment process in attracting large number of qualified candidates. A. Internal Factors: Working Conditions Promotional Opportunities Salary levels, type and extent of benefits Other personnel policies and practices Image of the organization Ability and skill of the management to stimulate the candidates Quality of the recruitment process 57  Factors cont… B. External Factors: Personnel policies and practices of other organizations regarding working conditions, salary, benefits, promotional opportunities, employee relations, etc. Career opportunities in other organizations Government regulations 58 1.4.4. Sources & methods of recruitment 1.Sources of recruitment There are two sources of recruitment-Internal and External sources a. Internal Sources: Vacant positions in organizations could be filled by those existing employees through transfers, promotions, demotion and recall from lay-off. Common in most large organizations 59  Advantages: The company has better knowledge of the strength and weakness of job candidates. Inside job candidates have better knowledge of the organization and its operations. Employees see that competence is rewarded and moral and performance may thus be enhanced. The return on investment that an organization has on its present work force is increased. 60  Disadvantages: People can be promoted to the point where they cannot successfully perform the job. Competition among employees for promotions can negatively affect employee moral. Discourage innovation and creativity due by blocking the door for new comers 61 b. External Sources Often needed by organizations that are growing rapidly or have a large demand for technical and skilled managerial employees. Advantages: The pool of talent is much larger bring “new blood” to the organization Disadvantage Attracting, contacting, and evaluating potential employees is more difficult. Adjustment or orientation time is longer for external candidates Morale problem can develop among internal employees who feel qualified to do the job. 62 2. Methods of Recruitment Job posting:- posting notices of job openings on organization bulletin boards for recruiting possible internal candidates. Job Advertisement:- It is a widely used recruitment method in order to reach relatively large numbers of potential applicants. College recruiting: It involves recruitment from educational institutions that offer opportunities to recruit recent graduates. Employment Agencies:-agencies have information on job seekers in terms of qualifications, skills, interests, etc. and can be a good source of employment by organizations. Employee referrals: Some organizations encourage their employees to refer potential applicants to an open position. This method of recruiting potential employees can cut recruiting costs by eliminating advertising and agency fees. It can also result in higher quality candidates since most employees would not recommend someone unless he/she believes that the individual can perform effectively. 63  4.2. Employee Selection It is the process of choosing the individual who can most successfully perform the job from the pool of qualified candidates. Is about individuals best suited for position process involves making a judgment about the fit between the applicant and the job (by considering knowledge, skills and abilities & etc. required to perform the job) 64  Environmental factors affecting the selection process Legal Considerations: ▪ Legislation, executive orders, and court decisions have a major impact on selection process. Speed of Decision Making: ▪ The time available to make the selection decision can have a major effect on the selection process. Applicant Pool: ▪ The number of applicants for a particular job can also affect the selection process. ▪ The process can be truly selective only if there are several qualified applicants for a particular position. Type of Organization ▪ The sector of the economy:—private, governmental, or not- for profit— can also affect the selection process.  4.2.1. Selection criteria Unless the criteria against which applicants will be measured are made explicit, it is impossible to make credible selection decisions. Most commonly selection of applicant depends upon the following criterions oEducation oCompetencies oExperience oSkills and abilities oPersonnel characteristics 66  4.2.2. The selection process ▪ Selection process consists of the ff steps: 1. Collecting application form 2. Initial Screening 3. Application Blank 4. Pre-employment Testing 5. Interview 6. Background Checks 7. Medical Exam/Drug Tests 8. Conditional job offer 9. Final Selection Decision 67 Employment Tests ▪ Is used measure individual characteristics ▪ to measure various dimensions of behavior like: mental abilities knowledge physical abilities personality interest temperament /character 68 Compressive Interview Used to supplement information gained in other steps in the selection process. Questions to be asked in this interview should be job related. The interview is usually done by a panel of interviewers consisting of:- – human resource personnel, – potential supervisor, and – other executives that may be of relevance in assessing the applicant‘s qualification. 69  Job Interviews ▪ Used to supplement information gained in other steps in the selection process. ▪ It is goal-oriented conversation (interviewer and applicant exchange information) A. Interview Planning: ▪ The physical location must be pleasant and private ▪ The interviewer should: o possess a pleasant personality, o empathy o ability to listen and communicate effectively. o be familiar with the applicant’s qualifications  Potential Interviewing Problems Inappropriate questions Permitting non-job-related information Premature judgment Receiving negative information about candidate/Viewing the candidate negatively Interviewer domination Pressure to Hire large no of employee in short time Contrast effect Lack of training Nonverbal communication  Nonverbal Communication Body language is nonverbal communication in which physical actions, such as gestures and facial expressions, convey thoughts and emotions. Avoid sending inappropriate or unintended nonverbal signals.  Interview cont…. The interview could be structured or unstructured. Structured interviews are preferred in a situation where it is important to cover certain basic questions related with the job to all applicants. Problems in conducting Interviews Interviewers may be favorably or unfavorably impressed with job applicant for the wrong reasons. Interviewers may have personal biases. Example: way of dress, hairstyle, etc. Interviewers may allow a simple characteristic to dominate judgment of all traits. 73  Interview cont…. Guidelines for effective interview: Interviewers should be carefully selected and trained Interviewers should be planned by outlining the information that is to be obtained and questions to be asked. The interviewers should put the interviewee at ease. The fact obtained by the interview should be recorded immediately Effectiveness of the interview process should be evaluated 74  Reference checking/Background Investigation It involves contacting individuals who are listed as references to the applicant. It may include contacting former employers to confirm the candidate‘s work record and performance level, contacting other job related personal, and educational references to verify accomplishments shown in the application. 75 Medical Examination Determines whether applicant is physically capable of performing the work. All exams must be directly relevant to the job requirements, and a firm cannot order a medical exam until the applicant is offered employment. Notification to Candidates/ Final employment Decision Results should be made known to candidates as soon as possible. Delay may result in firm losing prime candidate. Unsuccessful candidates should also be promptly notified. 4.3. Orientation /induction/socialization A procedure for providing new employees with basic background information about the firm. It is the introduction of new employees to the organization, work unit, and job. This can be done by oral or written communications like manual, guidelines, etc The degree of the new employee’s knowledge about an organization affects his/her level of performance on the job… at least in the first few months. 78  Who does the orientation? 1. Human Resource Department A. General Company orientation ▪ Overview of organization: including ▪ founding, growth, goals, priorities problems ▪ Traditions(customs), organizational structure ▪ R/ships of various parts of the organization ▪ Key Policies and Procedures : ▪ Compensation (pay rates, how pay is received, advance on payment, loan from credit unions) ▪ Fringe Benefits:(Insurance, holidays and vacations, sick leave, maternity, training opportunities, recreation & etc.) ▪ Safety and Accident prevention:(health and first aid clinic, safety precaution, fire prevention and how to control, etc.)  B. Departmental and Job Orientation ▪ Department Functions: Goals and current priorities, department structure, department‘s relationship with other departments. etc. ▪ Job Duties and Responsibilities: is about job description, common problems and ways to overcome them, where and how to get materials, overtime needs and requirements etc ▪ Policies, Procedures, Rules and Regulations: Rules unique to the department, safety precaution, tour of the department & facilities 4.3.1. Purpose of orientation 8–81 Chapter 5 Introduction No organization can function without people; in fact no organization can function without developed people. Appropriately trained and developed HR can mean the difference between organizational success and failure. Organizations are in a constant state of change & if employee skills and knowledge are not also updated, then employees will be unable to adapt to these changes. Compiled by:- Temesgen T. 84  Concepts of Training and development What is Training? Training: Is a process whereby people acquire capabilities to aid in the achievement of goals ▪ Involves learning activities designed to improve employee’s performance at her/his current job ▪ is any process by which the aptitudes, skills and abilities of employees to Perform specific jobs are increased ▪ the act of increasing the knowledge and skills of an employee for doing a particular job Compiled by:- Temesgen T. 85  Managerial Development ▪ It is the systematic process of education, training & growing by which a person learns and applies information, knowledge, skills, attitudes and perceptions. ▪ It involves learning opportunities aimed at individual growth but not restricted to a specific job rather general knowledge and understanding Management development is any attempt to improve managerial performance by imparting knowledge, changing attitudes, or increasing skills with an aim to enhance the future performance of the company itself  Training & Development Cont… 87 Compiled by:- Temesgen T. 5.1. Needs and importance of training and development ▪ Increasing Productivity:- Instruction can help employees increase their level of performance on their present job assignment. ▪ Improving Quality: Better informed workers are less likely to make operational mistakes. ▪ Helping a Company Fulfills its Future Personnel Needs:- When the need arises, organizational vacancies can more easily be staffed from internal sources ▪ Improving Organizational Climate:- Production and product quality may improve; financial incentives may then be increased, internal promotions become stressed…. etc Compiled by:- Temesgen T. 88  Cont…. ▪ Improving Health and Safety: Proper training can help to prevent industrial accidents. A safer work environment leads to more stable mental attitudes on the part of employees. ▪ Obsolescence Prevention: Training and development program foster the initiative and creativity of employees and help to prevent manpower obsolescence. ▪ Personal Growth:- advancement on skill & knowledge. Compiled by:- Temesgen T. 89 Step Training and Development Process Needs analysis Determining training & development objectives Instructional design Validation Implement Evaluation & follow-up  Cont.. 1.Analyzing training and Dev’t needs: Identifying ▪who needs ▪ how much The training and dev‘t needs of an orgn fall into two: ▪ organizational needs & ▪ employee’s training needs  Contd ❑training and dev‘t needs are said to be existed in an organization when: ▪ There is a gap between the existing performance of an employee & the desired performance ▪ To assess whether such a gap exists requires skills inventory & analysis in the orgn.  Methods of gathering training &dev’t needs ❑It can be through: ▪ Organizational analysis /Performance/ ▪ Supervisory recommendations ▪ Employee suggestions ▪ Test of job knowledge & questionnaire survey ▪ Management requests 2. Determining training and development objective ▪ Effective training objectives should state: ▪ what will result for the organization? ▪ departments or individuals and? ▪ when the training is completed? ▪ The outcomes should be described in writing?  Methods and techniques of training o On- the- job training: is delivered to employees while they perform their regular jobs. ▪ Employees do not lose time while learning. ▪ It is usually less expensive than off-job training ▪ Off the job Training: Training away from the actual work site. ▪ Such kind of training is conducted at a training facility designed specifically for training purpose only.  5. Evaluating training program success Types of criteria Trainers should try to collect 5 types of data when evaluating training programs Measures of reaction Learning Behavioral change Organizational results Return on investment/ROI ▪ The first 4 of these criteria are widely used to evaluate training programs and the last, ROI, has recently been added as another important source of evaluation data.  Cont.. Reactions - trainees‘ attitude towards the training program, instructors, facilities. Learning - changes in knowledge by trainees or level of knowledge reached after training Behavior - changes in job performance or level of job performance reached after training Results - changes in organizational measures, e.g. productivity, turnover, absence due to training, ROI - Monetary values of the results/benefits  Management Development ▪ MD: is any attempt to improve managerial performance by imparting knowledge, changing attitudes or increasing skills. o The general management development process consists of: Assessing the company‘s strategic needs (for instance, to fill future executive ,opining, or to boost competitiveness), Apprising the managers performance, and then Developing the managers (and future managers) CHAPTER SIX PERFORMANCE APPRAISAL  Definition of PA It is the process of evaluating how well employees do their jobs compared with a set of standards ▪ is a formal, structured system of measuring and evaluating an employee‘s job related behaviors and outcomes to discover how and why the employee is presently performing on the job  Cont… According to Edwin Flippo, ―Performance appraisal is the systematic, periodic and an impartial rating of an employee‗s excellence in matters pertaining to his present job and his potential for a better job.‖ According to Wendell French, ―Performance appraisal and review is the formal, systematic assessment of how well employees are performing their jobs in relations to establish standards and the communication of that assessment to employees.‖ According to Dale Yoder, ―Performance appraisal includes all formal procedures used to evaluate personalities and contributions and potentials of group members in a working organization. It is a continuous process to secure information necessary for making correct and objective decisions on employees.‖  Objectives of Performance Appraisal 1) To effect promotions based on competence & performance 2) To assess training and development needs of employees. 3) To decide upon a pay raise 4) To let the employees know where they stand o to assist them with constructive criticism o guidance for the purpose of their development. 5. To improve communication 6. It know effectiveness of HRR activities  Cont.. Administrative Uses Development Uses Compensation ▪Identifying strengths and weakness Promotion Identifying areas for growth Dismissal Downsizing Development planning Layoffs planning training Coaching and career planning PERFORMANCE APPRAISAL  Performance appraisal steps Appraisal Process includes; Establishing Performance Standards: Performance standards are established based on job description and specification. The standard should be clear and incorporate all factors. Communicating standards to employees: In form these standards to all the employees including appraisers. Measuring actual employees’ performance: evaluate actual performance of employees through observation, interview, records, and reports. Evaluating factors affecting performance: Finding out the influence of various internal and external factors that may have an effect on performance. Such factors may include inadequate work facilities, equipments, restrictive policies, lack of cooperation from others, type of supervision, working conditions, etc.  Steps cont…. Comparison of actual performance with set standards: Comparing actual performance with standards set and finding out if there is any deviation. Discussing the appraisal with the employee: This is a very challenging step in the appraisal process as it involves presenting accurate appraisal to the employee and have the person accept the appraisal in a constructive manner. Initiating necessary corrective actions: this includes guiding, counseling, coaching and directing the employee or making arrangements for training and development of the employee in order to ensure improved performance. It could also involve making suggestions for some changes to be made in the standard, job analysis, or other internal or external factors to facilitate effective performance of employees.  Problems in Performance Appraisal Lack of Objectivity: Some traits used for evaluating performance are difficult to measure and thus lack objectivity. These factors may include loyalty, attitude, personality, etc. Halo Error: raters may perceive one factor as having significant importance and give a good or bad overall rating to an employee based on this one factor. Leniency: rating consistently higher than the expected norm or average. Strictness: being unduly critical of employees performance and thus result in consistently lower rating than the expected norm. Central tendency: Consistently rating employees near the average. In such cases, it would be very difficult to differentiate good performers from poor performers.  Problems cont… Recent Behavior bias: raters basing their evaluation on the employees‘ recent behavior. This may not be a representative of the overall performance of the employee throughout the evaluation period. Personal bias: raters having biases related employees‘ personal characteristics, race religion, gender, or age.  What should be Appraised? ▪ Quality: result of carrying out an activity approaches perfection, fulfilling the activity‘s intended purpose ▪ Quantity: amount produced, expressed in monetary terms, number of units, or number of competed activity cycles. ▪ Timeliness: degree to which an activity is completed or a result produced, at the earliest time desirable from standpoints ▪ Cost of Effectiveness degree to which the use of organization resources ▪ Need for supervision requiring supervisory intervention to prevent an adverse outcome. ▪ Interpersonal impact feeling of: Self-esteem, goodwill and cooperation among co-workers and subordinates.  When to evaluate /timing of evaluation ❑ The general trend is to evaluate employee: ▪ once in three months ▪ once in six months or ▪ once in a year and newly hired employees are rated more frequently than the older ones. There must be frequent evaluation to improve performance if there is any deficiency. Performance Appraisal Methods 1. Graphic rating scale –A scale that lists a number of traits and a range of performance for each that is used to identify the score that best describes an employee’s level of performance for each trait.  Graphic Rating Scale with Space for Comments  Performance Appraisal Methods (cont’d) 2. Alternation ranking method Ranking employees from best to worst on a particular trait, choosing highest, then lowest, until all are ranked. Alternation Ranking Scale 3. Paired comparison method Ranking employees by making a chart of all possible pairs of the employees for each trait and indicating which is the better employee of the pair.  Ranking Employees by the Paired Comparison Method Note: + means “better than.” − means “worse than.” For each chart, add up the number of + ‘s in each column to get the highest-ranked employee.  Performance Appraisal Methods (cont’d) 4. Forced distribution method – Similar to grading on a curve; predetermined percentages of ratees are placed in various performance categories. – Example: 15% high performers 20% high-average performers 30% average performers 20% low-average performers 15% low performers 5. Narrative Forms All or part of the written appraisal may be in narrative form. Here the person’s supervisor assesses the employee’s past performance and required areas of improvement. The supervisor’s narrative assessment aids helps the employee understand where his or her performance was good or bad, and how to improve that performance. Narrativ e Forms  Performance Appraisal Methods (cont’d) 6. Management by Objectives (MBO) Involves setting specific measurable goals with each employee and then periodically reviewing the progress made. 1. Set the organization’s goals. 2. Set departmental goals. 3. Discuss departmental goals. 4. Define expected results (set individual goals). 5. Performance reviews. 6. Provide feedback. Choosing the Right Appraisal Tool Criteria for Choosing an Appraisal Tool Employee Accessibility Ease-of-use Accuracy acceptance  Who should do the appraisal? The appraiser may be any person who has thorough knowledge about the job content, contents to be appraised, standards of contents, and who observes the employee while performing a job. The most typical appraisers are supervisors, peers, subordinates, employees themselves, users of service and consultants. Who Should Do the Appraising…Cont Immediate Self-rating supervisor Potential Peers Subordinates Appraisers Rating 360-degree committee feedback Characteristics of an Effective Appraisal System An appraisal system to be effective, it should possess the following essential characteristics; Reliability and Validity: An appraisal system should provide reliable and valid information. i.e., if two appraisers equally qualified and competent to evaluate an employee using the same appraisal technique, their rating should agree with each other. Appraisal technique should also be valid by measuring what it is suppose to measure, i.e., the factors used to measure performance need to be related to the job.  Cx cont… Job Relatedness: the criteria used for appraising employee performance should be job related. Information for the criteria should be determined thought job analysis. Performance Expectations: Managers should clearly explain performance expectations to their subordinates in advance of the appraisal period. This will ensure that employees direct their efforts towards the expected performance level. Standardization: Employees in the same job category should be appraised by using techniques, ratings etc., should be standardized as appraisal decisions affect all employees of the group.  Cx cont…. Qualified Appraisers: Responsibility for evaluating employee performance should be assigned to the individual (S) who directly observe at least a representative sample of job performance. Employee Access to Results: An effective appraisal system should provide feedback to employees on how well or bad they‘ve performed. Due Process: A formal procedure should be developed to permit employees to appeal appraisal results that they consider inaccurate or unfair. CHAPTER SEVEN COMPENSATION  Introduction Compensation is an important factor affecting how & why people choose to work at one organization over other. Employer must be reasonably competitive with several types of compensation to attract and retain competitive employee.  Employee Compensation Employee compensation – refers to all forms of pay or rewards going to employees, which include direct financial payments and indirect payments. Employee Compensation Components Direct financial Indirect financial payments payments Direct financial payments include wages, salaries, incentives, commissions, and bonuses. Indirect payments include financial benefits, like employer-paid insurance and vacations.  Total Extrinsic Compensation Direct Indirect Wages / Salaries Time Not Worked Vacations Breaks Holidays Commissions Insurance Plans Medical Bonuses Dental Life Gainsharing Security Plans Pensions Employee Services Educational assistance Recreational programs Compensation System Components Benefits Pay  Importance Of Compensation A. to employees: ▪ Source of income for employees & family ▪ It determines employees ` social status ▪ Is a faire reward for the work of employees B. to employers ▪ To attract capable employees to the organization ▪ To motivate employees to wards superior performance levels ▪ To retain current employees Factors Affecting the Compensation Mix  Methods of Direct payment 1.Time-based payment : It refers to the payment of a predetermined rate for normal time of work and relative to a time limit, such as an hour, day, week and month. Merits of time rate method It is simple and convenient method, workmen are not in a hurry to finish job which helps to pay attention to the quality of their work. It is can be used profitably where the output per worker is not measurable Draw Backs of Time-Rate Method is not a good motivator as it is not associated with performance  2. Performance-based payment method ▪ In this method, remuneration depends upon the quality and quantity of work. Advantages: It may result in motivation of employees to improve more performance. Disadvantage: It may result in scarifying quality of work for quantity The administration of incentive system is also problematic because employees are motivated to ―beat the dame‖ by keeping standards low so that they can maximize their pay with a minimum effort  C. Combination of the two methods It involves: ▪ paying salaries to employees and ▪ adding other output related payments (like bonus or commissions) to create a financial incentive for employees.  Indirect Compensation /Types of Employee Benefits and Service ▪ Medical and safety benefits ▪ Education and training benefits ▪ Payment for time not worked ▪ Employee service related benefits ▪ Other benefits like: loan benefits, o pension or provident fund, o employee allowance, funeral benefits, ▪ These benefits are usually known as fringe benefits  1.Employee Medical and Insurance Benefits o accidents, o unhealthy working conditions and o to protect the worker‘s productive capacity ▪ Ethiopian Labour Proclamation No. 377/2003 Article 92 of this proclamation obliges an employer to take the necessary measure to safeguard adequately the health and safety requirements. Article 93 of the proclamations obligate a worker for proper use of all safeguards safety devices and other appliance furnished for the protection of his health or safety of others.  Article 99 of 377/2003 states ▪ disablement as ―any employment injury as a consequence of which there is a decrease or loss of capacity to work‖. oThe effects of such disablement are: Temporary disablement Permanent partial disablement Permanent total disablement, and Death  Types of Medical Benefits ▪ Proclamation No. 377/2003 Article 105 deals comprehensively with the medical benefits to be provided to employees by their employers It includes the ff where worker sustains employment injury: o General and specialized medical and surgical care o Hospital and pharmaceutical care o Any necessary prosthetic or orthopaedic appliances  Cont… ❑Medical benefit shall be provided in the following : First- aid- facility Medical service given by organization owned health centres Refund of employee pharmaceutical expenses Coverage of medical expenses(Full versus partial coverage of medical expense, in patient versus out patient, local versus overseas  2. Education and Training Benefits Its benefits include: ▪ sponsorship for off duty courses, ▪ educational leave, tuition fee, ▪ refunds and scholarship, ▪ setting up of schools, hostels, providing grants - aid to the other schools ▪ provision of reading rooms and libraries for the benefits of employees etc.  3. Employee Paid Leaves Means payment for time not worked It includes : ▪ Sick leave with pay, ▪ vacation pay, paid rest and relief time, ▪ paid lunch periods, ▪ pay for religious holidays ▪ pay for the time spent in offering evidence in a court of law or other statutory bodies; ▪ payment for the time spent on casting one‘s vote at election time  Annual Leave (Paid Vacations): ▪ Federal Civil Servants Proclamation No. 515/2007 ▪ Article 37, specifies that a civil servant shall be entitled to annual leave of 20 working days for his first year of service and ▪ additional leave of one working day for every additional year of service ▪ duration of annual leave shall not exceed 30 working days.  Sick leave: ▪ providing full pay for an employee when: ▪ A physician‘s written excuse is available ▪ is no longer than three consecutive days ▪ Article 85 of Proclamation No. 377/2003, worker shall be entitled to sick leave when he or she is incapable of work owing to sickness other than resulting form employment injury and the leave shall not be more than six months. ▪ Payment for such leave shall be granted in the following manner: The first one month with 100% of his wage; The next two month with 50% of his wage; The next three months without pay  ❑ Maternity and Parental Leave ▪ Proclamation (No. 515/2007, Article 41) and Labour Proclamation (377/2003, Article 88) states a pregnant civil servant ▪ has a period of 30 consecutive days of maternity leave with pay preceding & ▪ Has a period of 60 consecutive days of maternity leave after her confinement. ❑ Paid holidays: ▪ Typical paid holidays are New Year‘s Day, Labour Day, Christmas, Mauled, Id Al Adaha (Arafa), etc. ▪ Proclamation No. 515/2007 and 377/2003 specify that any civil servant or employee shall incur pay no reduction  Service Related Employee Benefits Housing service Transportation service Cafeteria/canteen services Sports and Recreation Services Legal aid and Employee Counselling Loan benefits (Credit Societies) Funeral Benefits Child-Care Facilities Retirement Benefits  Chapter Eight Integration And Maintenance / Industrial Relation  Introduction Industrial Relations refer to the relations between; – trade unions and management – employers and employees – State/ government with employers, workers and their organizations.  Objectives of Industrial Relations To safeguard the interests of labor and of management by mutual understanding, To avoid industrial conflict and develop harmonious relations. To raise productivity to the higher level by reducing turnover and absenteeism. To establish and foster the growth of an Industrial democracy 8.1. Employee Discipline  Employee Discipline considered as a force that promotes individuals or groups to observe the rules, regulations and procedures Is a form of training that enforces organizational rules. The goal of preventive discipline is to heighten employee awareness of organizational policies and rules. Knowledge of disciplinary actions may prevent violations. The emphasis on preventive discipline is similar to the emphasis on preventing accidents.  Disciplinary Procedures The purpose and scope of a disciplinary procedure should be very clear. It should allow all employees to understand what is expected of them in respect of conduct, attendance and job performance....etc. Depending on the gravity of the offence, the Federal Civil Servants Proclamation article 67 states the following penalties which may be imposed on a civil servant for breach of discipline:  Cont… First offence Oral warning Second offence Written warning Third offence Fine up to one month‘s salary Fourth offence Fine up to three month‘s salary Fifth Down grading Sixth Dismissal The penalties specified from (a) to (c) are classified as simple disciplinary penalties. The penalties specified from (d) to (f) are classified as rigorous penalties. Effective Discipline helps to set limits and informs people requires accurate written record keeping is immediate is handled impersonally 8.2. Collective Bargaining  Collective Bargaining Cont… It may be defined as a process in which conditions of employment are determined by agreement between representatives of the union, on the one hand, and those of the employer. It is called ―Collective‖ because both the employer and the employees act as a group. It is described as ―bargaining‖ because the method of reaching an agreement involves proposals and counter proposals, offers and counter offers.  Collective bargaining cont… Trade Unionism A labour union or trade union is an organization of workers formed to promote, protect, and improve, the social, economic and political interests of its members. The dominant interest with which the union is concerned is economic – demand for improved wages, hours, working conditions etc.  Why employee form & join union? Factors leading employee unionization are; ▪ Compensation ▪ Non- competitive pay ▪ Inadequate benefit ▪ Inequitable pay raises ▪ Working environment ▪ Inadequate staff ▪ Mandatory overtime ▪ Poor working condition  Factors cont…. ▪ Management style ▪ Subjective management decision making ▪ Use of fear & intimidation ▪ Lack of recognition ▪ Organizational treatment ▪ Job insecurity ▪ Unfair discipline & policies ▪ Not responsive to complaints ▪ Harassment & abusive treatment  Strikes, Lockouts And Picketing If a union and an employer are unable to reach on an agreement through the bargaining process, there are a number of options available. Some of theme are; Strike is a refusal to work by employees acting with a common purpose. The usual purpose of a strike is to force an employer to agree to terms and conditions of employment. Picketing is a peaceful means by which employees can increase the pressure on their employer to agree to terms and conditions of employment favorable to them. The purpose of the picket line is to persuade persons not to do work for, or do business with, the employer.  Boycott Boycott a refusal to buy or to use someone‘s (employer's) products or services primary boycott involves the employees‘ refusals to buy their employer‘s products or services secondary boycott; boycott directed mainly against third parties who deal with the struck employer  Cont…. Lockout is a restriction by the employer of work that normally would be available for employees, generally by suspending work or closing the place of employment. It is generally intended to force those employees, or to aid another employer to compel employees, to agree to terms and conditions of employment. 8.3. Grievance Handling  Grievance Handling Cont… Grievance is a complaint by an employee about management behaviour. It may be real or it may be the result of a misconception or a misunderstanding. The purpose of managing grievances is to correct matters that have been and are going wrong by: Investigating the situation; Identifying what has caused the employee complaint; and Taking the appropriate action to resolve the complaint to the mutual satisfaction of the employee and the management. In managing employee grievances, management acquires and develops an ability to distinguish real from unfounded grievances and then to explain clearly to the employee why their complaint merits no action by management.  Grievance Handling cont…. The grievance needs to be resolved at the earliest possible stage. Identifying common employee grievances/complaints Complaints from individual employees can centre on many aspects of management behaviour. Complains about management‘s behaviour tend to come from individual employees as sated above and can range over a wide number of issues such as: a bonus payment has been calculated incorrectly a disciplinary penalty that is too harsh a promotion that has been unreasonably denied‘ access to a training opportunity that has been disallowed; a job that is currently under graded; an employee that has been sexually harassed by another employee or manger  Importance of handling employee grievances/complaints A grievance is liked an infection. Unless it is dealt with quickly, and efficiently, it will spread quickly & causing unnecessary pain and suffering (lower productivity, high absenteeism, employee turnover and commitment). Unresolved dissatisfaction gives rise to: – Employee frustration – Deteriorating interpersonal relationships – Low morale – Poor performance seen in lower productivity and a poorer quality of output or service – Disciplinary problems including poor performance by employee, resignation and loss of good staff – Increased employee absenteeism.  CHAPTER NINE EMPLOYEE PROMOTION, DEMOTION, TRANSFERS & SEPARATION  9.1. PROMOTION Definitions of Promotion According to Scott and Clothier, ―A promotion is the transfer of an employee to a job which pays more money or one that carries some preferred status.‖ According to Prof Mamoria, ―Promotion is a term which covers a change and calls for greater responsibilities, and usually involves higher pay and better terms and conditions of service and, therefore, a higher status or rank.‖ According to Arun Monappa and Saiyadain, ―Promotion is the upward reassignment of an individual in an organization‘s hierarchy, accompanied by increased responsibilities, enhanced status, and usually with increased income.‖  Cont …. From the above definitions, we can say that promotion usually implies several things to the person concerned higher status, both at work and in the community outside, more pay and fringe benefits, greater job security and a more senior position from which a person renders better service to his organization.  Purposes of Promotion To motivate employees to higher productivity To attract and retain qualified and competent employees To recognize and reward the efficiency of an employee To fill up higher vacancies from within the organization To build loyalty, morale, and sense of belongingness in the employee  Types of Promotion Depending on which elements increase and which elements remain stagnant, promotions may be classified in to the following; 1.Horizontal/ limited promotion: This type of promotion includes an increase in responsibilities and pay and a change in designation. But the employee concerned does not go beyond the limit the job classification. 2.Vertical promotion: - this types of promotion results in greater responsibility, prestige and pay together with a change in the nature of the job.  Basis of Promotion a. Promotion Based on Seniority based on the length of service of an employee in an organization. Seniority systems put a premium on length of service and job experience. the employees are promoted to higher positions purely based on their length of service irrespective of their qualifications, experience, performance and track record.  Seniority based cont… Arguments for Promotion by Seniority All employees are assured of promotion which will come automatically when it is due. Seniority is a factor which can be measured quantitatively; it is easily explained and understood and therefore, escapes charges of favoritism and discrimination. The management will have a known man. This reduces the risk associated with bringing an unknown person from outside. Seniority as a criterion for promotion makes its impact on reduction in employee turnover.  Seniority based cont… Arguments against Promotion by Seniority If the worth of an employee is not appreciated and given due recognition, it results in frustration and low morale of the employees. Promotions by seniority leads to capable young men looking for better prospects elsewhere. With the fast changing world of technology it is necessary to infuse new blood into the organization. This is denied when the policy of promotion is by seniority.  b. Promotion Based on Merit Employees are promoted to higher positions purely on their performance and work record. Here, the management will look into the qualifications, experience, previous work record, performance capability etc. The service seniority of the employee would not be considered for promotion. Arguments for Promotion by Merit: Promotion by merit brings rewards for meritorious work. This encourages an employee to work hard and advance in the organization. Promotion by merit enhances organizational efficiency and maximizes utilization of talent. Promotion by merit acts as a motivator. This leads to increased productivity.  Merit Based cont… Arguments against Promotion by Merit: Trade unions regard merit as favoritism. They distrust the sincerity of management when it claims the right to promote solely on merit. Efficiency in the present job does not necessarily predict ability to do well in a job with greater responsibility. The devices used for judging ability such as performance appraisal ratings and confidential reports are not above subjectivity. Both seniority and merit based promotion has its own relative strengths and weaknesses. Every organization should decide on the relative weights it will give to merit and seniority in making promotion decisions. Many organizations try to maintain a balance between merit and seniority.  c. Merit Cum Seniority Promotion Promotion based on ―Merit cum Seniority‖ would have a blend of the advantages of both the systems discussed above. Both the service seniority and work efficiency will be taken into account in promoting an employee. Merit cum seniority method has been considered as the best method of promotion as it gives due weightage to the skill efficiency and better service record of the employee.  9.2. DEMOTION Demotion is a process by which the employee is downgraded and sent to a lower position from the one he is holding at present. When an employee is moved to a job with less responsibility, status or compensation he is said to be demoted. Demotion is the reverse of promotion. Demotions, being a serious penalty, must be handled tactfully.  Causes of Demotion Demotion may be used as a disciplinary weapon. Demotion may be resorted to when employees, because of ill health or personal reasons, cannot do their job properly. If a company curtails some of its activities, employees are often required to accept lower- level position until normally is restored. If an employee finds it difficult to meet job requirement standards, following his promotion he may be reverted to his old position.  9.3. TRANSFER A transfer is a change in job assignment. It does not involve a change in responsibility and status. A movement of an employee between equivalent positions. A transfer therefore does not involve a change of responsibility or compensation. Transfers are normally made to place employees in positions where they are likely to be more effective or where they are likely to get greater job satisfaction. Transfers may be either organization-initiated or employee initiated. A transfer may be either temporary or permanent.  9.4. SEPARATION Separation means cessation of service of agreement with the organization. Separation can be the result of: A. Resignation A resignation is a voluntary separation. When a termination is initiated by the employee himself. Resignations may be put in voluntarily by the employees on grounds of health, physical disability, better opportunities elsewhere, or maladjustment with company policy and affairs. The personnel department should investigate the real reasons behind such resignations. Eg ; exit interview  Separation cont… B. Discharge A discharge involves permanent separation of an employee from the organization because of poor performance, violation of rules or poor code of conduct. C. Dismissal This means termination of service or contract as a punishment for a serious misconduct or act of indiscipline. This is the supreme punishment which a company can give for disciplining workmen as a last resort.